The first disbursement of fund as per the new schemes announced in the latest state budget for hardware startups will be done in April, M Sivasankar, Principal Secretary (Electronics and IT), Govt. of Kerala, announced here today.
Delineating the problems being faced by hardware startups in the state, Sivasankar said, “One of the fundamental requirements is their need to have a huge working capital, which is traditionally not funded by Angels, VCs or High Networth Individuals (HNIs). The banks have certain financial norms like collateral security for giving credit”.
He was speaking on the concluding day of the fifth edition of the two-day Seeding Kerala investment summit, organised by Kerala Startup Mission (KSUM).
“We have a very large number of hardware startups in Kerala. They face problems for running companies, and taking prototypes to the next level. So, we have suggested to the government to have a framework by which the hardware startup requirements are funded to a certain extent,” he pointed out.
Explaining, Sivasankar said the budget has announced a scheme by which if a startup has orders and if the orders are genuine, then a committee can give recommendations that this startup is eligible for certain level of funding. With that recommendation, the startup can practically go and get over the counter financial disbursement from state financial institutions like Kerala State Industrial Development Corporation Limited (KSIDC) and Kerala Financial Corporation (KFC).
“The first disbursement will be done in April. I hope banks will also join in this larger bracket in a short period of time. When we put this framework into practice, it would solve the very big challenge of companies,” he added.
“Secondly, the interesting announcement made by the government is about impact funding. One thing which Kerala has learned in the aftermath of the last two floods is that we need premium to sustainability. A premium to the larger commitment to keep the world in a better place and hand it over to the next generation,” Sivasankar noted.
“To that extent, the millennium goals have been announced by the United Nations. As per the impact funding scheme, any startup that is going to work on any of the Social Development Goals (SDGs)-related themes, will get special dispensation for investing some money into kick starting the process. It is a very bureaucratic-less and red tape-less programme,” he said.
“The third thing we are planning is about the whole concept of Corporate Social Responsibility (CSR) getting rooted through a very transparent and assessment system into the startup ecosystem. We have already created a set of incubators across colleges. Putting CSR money into incubators is one thing. More importantly, it’s about channelizing CSR through the incubators to the startups,” the official added.
On the impact of the event, he said: “This edition of Seeding Kerala actually creates the situation that the participants can go back with confidence of being the spoke persons and ambassadors of the startup ecosystem of Kerala.”
Virginia Tan, Co-founder and CEO, She Loves Tech, was the chief guest at the concluding session of the event. Dr Saji Gopinath, CEO, KSUM, was also present.
The investment summit brought together leading figures in the country’s startup ecosystem besides senior government officials. KSUM is the nodal agency of the Kerala Government for entrepreneurship development and incubation activities in the state.